In-kind Wages: Understanding Workers’ Strategies to Cope with Inflation and Poverty

Although non-monetary benefits remain an important component of most workers’ wages in today's industrial economies, development economists and economic historians tend to view such payments as a remnant of older, obsolete labour regimes. But when in-kind wages are assumed to be exploitative, an outcome of market inefficiencies, or simply the result of limited supply of coinage, their actual economic functions can be obscured. Once we drop the constraints imposed by such assumptions and look at the historical evidence, we are forced to confront the possibility that workers actually used them to their advantage.

In this article, I analyse how in-kind wages functioned in certain historical contexts, and conclude that available explanations are far too limited. As the historical cases studied show, the different forms of in-kind payments must be examined because those forms – not just overall wage levels – helped determine labour supply, social and occupational mobility, and even capital formation.

The goods and services that made up in-kind payments also provide a fuller understanding of gender wage gaps. Non-monetary wages gave workers options that cash wages did not, and so created and reproduced fundamental inequalities among different groups.